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EC Probe Focuses on Intel Marketing

The European Commission said it is investigating U.S. computer chip giant Intel Corp.'s marketing practices, which the company immediately defended as "legal and fair."

The EC said it is investigating direct competitors' complaints from late last year that Intel uses its dominance to reward some customers and punish others to ensure loyalty. In part, the commission is investigating terms of the "Intel inside" marketing campaign, which has helped make Intel a household name worldwide and includes joint advertising with computer makers who depend on Intel chips for their products' processing brains.

An EC statement said nothing had been proved against Intel: "The investigation is at a very early stage, and the commission has not made any finding that Intel has actually committed an infringement of European Union competition law."

Intel, which has been investigated before, said it is co-operating fully with the EU investigation. "We have been notified and have a request for information by the director general for competition. And as is our normal policy, we are cooperating," said Chuck Mulloy, a spokesman for Santa Clara, Calif.-based Intel. He said the commission had asked the company to provide information related to its general business practices and the architecture of its microprocessor bus, which carries information between devices within a computer.

The European Commission declined to identify the competitors that had complained. But industry sources said Intel's largest competitor, Advanced Micro Devices of Sunnyvale, Calif., is one of two firms behind the probe. Intel shares fell $2 to close at $23.63 on Nasdaq.